Free Doesn't Mean Devalued

from the more-to-life-than-money dept

The concept of zero took ages for societies to recognize, let alone understand. Mike has explained before how it's been a stumbling block in economics for some libertarian and "free market" types more recently. People who think about economics in terms of scarcity get upset when abundance pushes price down towards zero, as if the economic equation were broken. But if you flip the equation and think of it as a cost of zero, you realize that the trick is to use as much of those abundant goods as possible, adding value to complementary scarcities for which you can charge. Zero doesn't break economics, it just requires a different approach.

But artists and other creators hit a different stumbling block than libertarians (libertarian artists aside...). Zero is a problem because they feel like their art is worthless; they aren't hung up on scarcity, they're hung up on "devaluation." We've heard it from journalists. I hear it most often from fellow songwriters. The economic theory makes them feel as though their work is just viewed as some sort of cheap commodity. The thing is, value and price are not the same. Price is monetary value, but value is so much more than money. Price is what gets driven down to marginal cost, but value factors into the demand side of the equation. Expensive things aren't necessarily valuable, and valuable things aren't necessarily expensive. I value oxygen a lot, but it seems silly to pay for the air I breathe each minute, given the abundant supply.

More importantly, songwriters who get hung up on "devaluation" confuse recordings with music. They equate the two. A recording is not the song, it's just an instance of it, and a digital audio file is just an instance of the recording. Equating these reduces music to recordings to files. As important as recordings are, there's so much more to music. When you think of a song, do you think of the recording, or a memory you had connecting with the music? Do you think of the file and how much it cost, or the emotions, people and experiences that the music conjures up? The recordings are just a means through which we experience the music. Songwriters (of all people!) should know that the value in music is so much more than the price of a recording. It's not devaluing music to give it away for free, but it can increase its value by allowing more people to connect with it, to know, love and understand it -- to value it. It's through that experience that music is valued, not price!

Ironically, the underlying concern ends up being economic -- how will we make money? A price of zero for digital audio files doesn't mean that no one values the songwriting profession, or that no one is willing to spend money on music and keep songwriters in business. Sharing digital audio files makes the music more valuable and leads to more opportunities for monetization. When you give music away and connect with an audience, the opportunity for monetization is in the associated scarcities -- access, containers, community, merchandise, relationships, unique goods, the creation of new music, etc. -- by giving people a reason to buy. Getting hung up on "devaluation" is a distraction from the opportunity -- the necessity -- to experiment with new business models.

Re: *Applause*

I like the idea of having a running collection of all the posts relevant to musicians (both from this site and others). It needs to be just one place that can be linked to instead of having to find and link all of them each time.

Re: Re: Re: Re: *Applause*

It might be helpful to have some of the main posts highlighted though. I find the article tags are useful when searching for recent examples. The approaching infinity series is great for the key economic points, but there might be some key music/artist posts worth highlighting in some shape or form for newcomers.

Re: Re: Re: *Applause*

While Techdirt will argue this point across all forms of content and I agree with most of it, I'm significantly less convinced that this ideology works quite as well with other forms besides music.

Complex PC videogames of the single player variety come to mind as a particularly difficult ones. They tend to be very expensive projects involving a lot people (much more so than producing an album) and by their nature tend to have few real scarcities, and those that exist are often quite gimmicky and secondary, such that they often represent poor reasons to buy for the more casual of gamers.

I must admit that while I usually vigorously defend the perspective that I share with Techdirt, in the case of some videogames and software, I find myself quite at a loss at conceiving workable and *safe* business models based on the premise of 0-cost of the abundant good without forcibly and artificially modifying the nature of an otherwise perfectly valid product.

Re: Re: Re: Re: *Applause*

"While Techdirt will argue this point across all forms of content and I agree with most of it, I'm significantly less convinced that this ideology works quite as well with other forms besides music."

I'd suggest that we have a better idea of how the theory applies to music than it does to videogames, because digital recordings hit that infinite good status at least a decade ago. As noted on the Music Club page: "We regularly use the music industry as a great example of a "leading indicator" industry that is dealing with the issues we talk about way before many other industries will do so."

I believe there scarcities in every space, but it'll take some time to figure out which ones people will pay for, and how to structure a successful business model. The music industry is a great example because its ahead of the curve in terms of being forced to deal with these issues.

Value should NEVER equal price

As consumers, getting the most value for the price is the whole point. There are lots of things out there that are worth the price, but because we have limited resources as consumers we try to choose those items that will give us the most value for our money. So an exchange of equal value for money just isn't interesting.

There's an important lesson here for producers as well. If you set the price for your good based on the value you provide to your customers, you're doing it wrong.

You might get by just fine for a good long while, but eventually someone will not only be willing to provide the good at a lower margin, but will also be driven to find a cheaper/better way to provide the service (perhaps *because* of that low margin) and you'll find yourself priced way out of the market.

Good article. Artists always seem to look at the revenue side and ignore the cost side. Think of the cost avoidance (marketing budget, payola, etc.) of being able to market a youn artist through shared digital files, instead of traditonal (i.e costly) means.

Let us know when egoboo and Whuffie can be used to pay for the electric and your kids' orthodonture invoices. As far as I am concerned, anything purporting to be a business model which fails to address "yes, and how do I get the bills paid?" factor is not actually a business model.

A post-scarcity economy makes a lot more sense from the bottom up, rather than the top down.

Re: Re:

Some of those "proven" business models have not succeeded for some people. Perhaps "proven" is not the right word to use.

In any case, I'm responding to your statement "Getting hung up on 'devaluation' is a distraction ..." -- that's a fairly odd way to put it. "Hang-ups," as if we're just too uptight or something, and all we need to do is drop some acid and mellow out at Berkeley, and stop being so SQUARE, man, worrying about those bills. They're just paper, man.

"Exploring" sounds a lot like, "Hey, maybe this will work! Maybe it won't!"

If you would like to have people get interested in your ideas, telling them that their concerns are a hangup, to be dismissed, is not the approach that will win you tons of converts. How about saying, "Here's how you get paid: ..."?

Re: Re: Re:

Everyone seems to think it's a right to get paid. Unless you sign a contract agreeing to getting paid said amount when creating such works, you are owed nothing.

I can make music, but no one will pay me for it. I can build a house, but no one will pay me for it, I am not good at either, but I can do them. When I go to a store, I expect to pay for things. But If I can get something for free, why shouldn't I? No I am not talking about stealing from a store.

The point is, musicians make music, and to be making money at it, they have to be good, or find other work.

Re: Re: Re:

"Some of those "proven" business models have not succeeded for some people. Perhaps "proven" is not the right word to use."

Well, I did say being proven (suggesting an on-going process), and I ended the post by highlighting the need to experiment. It is new territory and there's lots to learn, but there's some patterns we can see that have been working (see: scarcity/abundance).

"In any case, I'm responding to your statement "Getting hung up on 'devaluation' is a distraction ..." -- that's a fairly odd way to put it. "Hang-ups," as if we're just too uptight or something, and all we need to do is drop some acid and mellow out at Berkeley, and stop being so SQUARE, man, worrying about those bills. They're just paper, man."

You should see some of the folk musicians I've been talking to who thing that a print dialogue box style TPM will stop file sharing.

There are artists out there who see a $0 price tag as an enormous stumbling block to any kind of business model involving free... yet the alternative of turning to artificial scarcity is fragile ground. I'd call that a hangup and a distraction -- they can't see anything else but a giant zero.

I'm not really sure where you get the "stop worrying about those bills" mentality from. It's amazing. If I lead with the economics, I'm cold and insensitive and don't give a damn about musicians. If I lead by addressing artists, I'm accused of being a hippie.

I think you're hung up on the word hangup -- stop being so square. ;)

"If you would like to have people get interested in your ideas, telling them that their concerns are a hangup, to be dismissed, is not the approach that will win you tons of converts. How about saying, "Here's how you get paid: ..."?"

Thanks for the feedback. I see you still haven't clicked through any of the links. I thought I focused on that in the last paragraph and providing lots of examples and starting points for thinking about the business model side of things more deeply, but this post was focused on the difference between price and value. As I said, a lot of songwriters hear the business/economics side and tune it out if it involves a $0 price tag ("but my music has value!"). This post was an attempt to break down that barrier, so we can get back to economics / business part in more detail.

Re: Re: Re:

"Hang-ups," as if we're just too uptight or something, and all we need to do is drop some acid and mellow out at Berkeley, and stop being so SQUARE, man, worrying about those bills.

He didn't say don't worry about the bills, he said don't concentrate on the fact that the price of music files is trending toward zero.

"Exploring" sounds a lot like, "Hey, maybe this will work! Maybe it won't!"

If you have several options, and one of them (the old way of doing it) could be described as "this will not work for very much longer" and the rest are "maybe this will work and maybe not", would it not be a good idea to start looking into the alternatives?

If you would like to have people get interested in your ideas, telling them that their concerns are a hangup, to be dismissed, is not the approach that will win you tons of converts.

Firstly, he's not just telling them they should be dismissed, he's explaining why and showing what to do instead. Secondly, what do you think he should do to win converts? He's pointing out a major issue that is keeping some artists from updating their business models. How can he show them how to improve their prospects without pointing out the problem?

enterprise software needs to learn this

"More importantly, songwriters who get hung up on "devaluation" confuse recordings with music."

There's also so much more to the "music" than the recordings as Mike and others always point out. This made me think of David Sylvian, http://www.davidsylvian.com/texts/, who publishes his lyrics freely on his website and in liner notes on his albums, but still manages to sell (usually sell out) books of his lyrics. Suzanne Vega, Jane Siberry, and many other artists have done this successfully as well.

Re:

Free can be very good!

I think free can be very useful as a introduction, in that you use free to introduce your business. Or part of your business. Free can be the hook that brings people in to see your at charge services. Free can also be given value if you make it exclusive. That is, not "everyone" gets free, just those that are already customers or have completed something.
Just a thought,
Monica S
Los Angeles Computer Repair
http://www.sebecomputercare.com/?p=1178

Consumer Perception is Changing

This is an encouraging article for those of us who are fully aware where Art is going--yet we're dragging our feet nonetheless. I firmly believe that Art is FREE and audience is priceless--however alternative revenue streams must embody the new model to perpetuate Art and sustain Artists.
The idea that consumers are searching high and low to find something they most definitely value for FREE rather than but it for $1.99 is my case in point; consumers know the value in what they're getting, and some are actually willing to DONATE more to the Artist than they would have been willing to pay for the product. Now consider the time one might spend to locate the FREE product and the value of their time spent and one might conclude the value of FREE has everything to do with principle and nothing to do with cost.
Miles Maker
Writer/Director of "Brown Baby" (2010)
The totally FREE movie you can share, remix, re-use and rediscover!
DONATE on IndieGoGo: http://www.indiegogo.com/brown-baby
"Brown Baby" Website http://www.brownbabymovie.com
"Brown Baby" on Twitter: http://www.twitter.com/brownbabymovie
"Brown Baby" on Facebook: http://www.facebook.com/brownbabymovie

Piracy is just the new name

Perhaps I'm dating myself, but when I was a kid I would use extended recording time cassettes to record a radio station I liked. I would then use a dual-tape recorder to edit it down to just the songs I liked that day, eliminating all the commercials and DJ blather. By the time I was done editing down, I could get about a week's worth of radio recordings into a single tape of just the songs I liked. I never thought of it as stealing. It took me so long to do, it seemed like I was just replacing store cost with labor time (which grade-school kids have plenty of, more than money). I rarely shared tapes, but got a couple of requests now and then. Most of my friends would just tape songs off the albums/CDs they like best, and share their own "if I were a DJ" style collections. It was called sharing, not stealing, and nobody thought twice about it. We bought A LOT more music back then, both CDs and concerts. Most of our allowances ended up on music and video games.

I buy a lot less music now. It doesn't have anything to do with piracy (I never have file-shared or torrented music), or because I hate iTunes (with a passion). It's because I'm far less passionate about music than I was a kid. There's no way I would spend the same time recording radio and editing song clips down now. I have more money than time now, but I spend less of both on music. For that, I blame the musicians. You can't blame piracy -- I bought a lot more back when I was getting all that "free" access to new music (via my own hardware and time). It's just rare that any new music really grabs me the way it did back then. I listen to NPR more often than the local "Rock" station now -- which doesn't seem like much of a loss, because they still seem to play the same old RIAA-label 90's pop rock every time I switch back over. Even the DJ's don't see enough good new stuff from the labels to fill their roster, so they go back to music from the days when portable music involved a rewind button. So why should I listen?

Re: Piracy is just the new name

Fred, when you were doing those tapes, it would have taken more than your lifetime to make a single tape for each person in your neighborhood. Essentially, your impact on the music industry would be on the scale of a fly farting in the Superdome.

The current file share systems means that you can be friends with the entire planet, and within a day, have helped to spread music to everyone in the world. The impact on the music industry is pretty much like the superdome falling on the fly.

As you get older, I think it is natural to lose a certain amount of passion for popular / current music, as it often isn't the type of music we like. We don't find anyone making new songs in the styles we do like, and those styles tend to become stale (classic rock, example). In the same manner that our parents would listen to a classical or easy listening station and swear about that "damn rock n roll boogie woogie stuff", we are starting to see the age divide in music somewhere around 35 years of age, and a second solid wall above 45 or so. Even though the music is often similar in construction, the current new "good" music isn't up to the standards that older listeners are use to.

IMHO, it is part of the process of the "freeing" of music. Tons of bands, tons of music, most of it crud. Few true emerging stars, and most of them are more manufactured than ever, such as the Jonas Brothers, Mylie Cyrus and all that Disney pre-chewed musical pap. Most of the rest of the pool of music is wide and very shallow, and not all that enjoyable - and this from a guy who's tastes run from electronic to alt-rock.

So the value of music? It's reached a point where everyone is doing it, and almost everyone is doing it poorly, and somehow tricking themselves into thinking they are great. Too bad most of it isn't memorable.

Re: Re: Piracy is just the new name

Way to miss the points made AC. Your denial of obvious analogies doesn't change the fact that the RIAA and DMCA do nothing but stifle people's involvement with music. People buy music because they're into it -- and they get into it by hearing it, and they hear it best on their own terms. P2P is no different from radio, and cassettes are no different from MP3 players or other portable storage, in the way they allow consumer exposure, exchange, and interaction with music. They are just much faster, bigger, and better. They don't change the core consumer relationship at all, except to expand and simplify it. Maybe the devolvement toward mediocrity you bring up (I didn't) is more a product of a change in how industry attempts to control the music you have access to, not the music itself.

If anything, I might chalk up my lack of interest to music to my staying away from P2P. Even the traditional mediums for exposing more consumers to more music are under attack -- venue and radio replay fees are all on the rise. Everything the RIAA/big-labels have done in the last ~15 years has been counter-productive and stupid anti-music-lover litigious crap, which is why their business is gradually failing.

Good musicians should just bypass it all, and do what they can to expose me to their music directly. The old guard has not only failed, they have made things WORSE than they used to be with old/slow tape and sneakernet. Real musicians should just abandon them entirely.

Re: Re: Piracy is just the new name

I'm 26, a good decade shy of your "wall", and I feel the same frustration with musicians that Fred does. When I was in highschool, ripping and burning CDs was a common pastime in my circle of friends, and most of the stuff I like I was introduced to in someone else's car or basement. But now that I'm in the real world, I don't have time to spend cruising around (let alone money to pay for the gas). Filesharing was a godsend because my now-remote friends and I could keep recommending stuff to each other. With the decision that sharing music is wrong, that's been cut off. I don't have any passion for music any more because the Industry has found ways to crush any enthusiasm my generation generates.

And I'm pissed off at your classic rock gods, too. Pink Floyd and Led Zepelin and other bands had some *really awesome* music, but their CDs are both hard to find and too expensive to justify when I'm trying to pay for electric and feed a young family. For the price of Dark Side of the Moon I could buy food for my daughter for a couple weeks, at least. It sucks, but on a tight budget I literally can't afford to spend money on music, especially stuff I haven't tasted first. So, I don't buy music any more.

And as far as modern bands not being memorable, you're kidding yourself if you think The Past had more musicians who were better. You had the big names, the Micheal Jacksons and such, but there was also a lot of crud in there, too. You had one-hit-wonders who would flash in the pan and then be gone. and most music made in the late 80s and through the 90s was a few good songs padded up with fluff. You'd buy a CD with 12 tracks and find only 3 of them were worth listening to. The only reason you think we're worse off is because there's more music and it's easier to be exposed -- and, yeah, the more songs you listen to the more songs you'll find that are sub-par. To throw in a car analogy, you'll find more cars going "too slow" when you're driving at 80mph that when you're driving at 50mph, for no other reason than you bump into more of them. (Figuratively, of course.)

Why is it TechDirt's job to tell someone that? If you want to "get paid" get a job. If you want music or art to be your job, work in a stuido, or gallery, etc. or come up with your own business model, one that works for you.

You kwow what? you're right.

You guys are hilarious. In America value IS yes, infact measured by money. As for music having value beyond it's commercial transaction - I agree. And so playing in a band at your friends birthday party has all the wonderful intangibles you mentioned. If I'm interested in that kind of psychic, emotional value? Why record it digitally or otherwise for anyone other than the people you know and care about or as a personal record. If there is the joy of music in my life, I have no need to put it on the internet or give it away for free... If I don't know you? If you weren't at the concert? You don't get to share the joy... (doubtless you have your own anyway) It's free right? So if you should happen to come across a copy, it's no loss to the public, & No loss to the artist. Oh, there will still be plenty of ART in a zero cost model, but none of you will have access to it unless you know the artist. We'll play for fun or sing at church or whatever. Distribute my music and try to make a living at it? what the F for? That will be a waste of my time. And it's foolish to attempt to support my family on potential "donations" for my music. There will be - like there are today - professional quality artists who treat it like a hobby. And you know what? That's great. The larger internet world will get good stuff if they know someone, who knows someone, who knows someone... after they sift through a ton of garbage and so it'll be like finding a funny viral video. Quality art for the masses will be occassional and random. But to agree with techdirt - in all honestly, that's all the greater public gets now in the current big music label model, so there won't be much change. I agree. Free is good. A music "industry' isn't needed anymore. F it. My firiends and I will buy t-shirts from each other and have a great time. And if you think I have this attitude because I'm not a great artist and couldn't make it as a star - you're worng, but I could give a rip because you'll never hear my music anyway. On monday we'll all go to our jobs that pay the bills by providing something scarce like good lines of code. But you know, that could be passed around free too - MicroSoft should give their stuff out for free too. Write a book with all your consulting gems in it Mike and let that get passed around the internet for free too... why have any industries for anything intellectual or creative. What a waste - all knowledge should be free.

Re: You kwow what? you're right.

1. Even if there was no way to make money, artists never have a desire to share what they create, right? Do you really believe creation is something inward-looking, reclusive, and private? I suspect you're not actually an artist, or you're not actually hording and hiding all of your creations.

2. Read the last paragraph again. No one is suggesting artists should work for free or rely on a tip jar. There are plenty of business models that use zero to an artists advantage, that help them to make more money by giving away abundant goods for free. See a sister post: Free Doesn't Mean Unpaid.

3. Everything on Techdirt is essentially in the public domain, available at no cost. How much more free do you want it to be? Techdirt practices what it preaches.

You kwow what? you're right.

You guys are hilarious. In America value IS yes, infact measured by money. As for music having value beyond it's commercial transaction - I agree. And so playing in a band at your friends birthday party has all the wonderful intangibles you mentioned. If I'm interested in that kind of psychic, emotional value? Why record it digitally or otherwise for anyone other than the people you know and care about or as a personal record. If there is the joy of music in my life, I have no need to put it on the internet or give it away for free... If I don't know you? If you weren't at the concert? You don't get to share the joy... (doubtless you have your own anyway) It's free right? So if you should happen to come across a copy, it's no loss to the public, & No loss to the artist. Oh, there will still be plenty of ART in a zero cost model, but none of you will have access to it unless you know the artist. We'll play for fun or sing at church or whatever. Distribute my music and try to make a living at it? what the F for? That will be a waste of my time. And it's foolish to attempt to support my family on potential "donations" for my music. There will be - like there are today - professional quality artists who treat it like a hobby. And you know what? That's great. The larger internet world will get good stuff if they know someone, who knows someone, who knows someone... after they sift through a ton of garbage and so it'll be like finding a funny viral video. Quality art for the masses will be occassional and random. But to agree with techdirt - in all honestly, that's all the greater public gets now in the current big music label model, so there won't be much change. I agree. Free is good. A music "industry' isn't needed anymore. F it. My firiends and I will buy t-shirts from each other and have a great time. And if you think I have this attitude because I'm not a great artist and couldn't make it as a star - you're worng, but I could give a rip because you'll never hear my music anyway. On monday we'll all go to our jobs that pay the bills by providing something scarce like good lines of code. But you know, that could be passed around free too - MicroSoft should give their stuff out for free too. Write a book with all your consulting gems in it Mike and let that get passed around the internet for free too... why have any industries for anything intellectual or creative. What a waste - all knowledge should be free.

Oh Blaise, the boss will be so glad that you had the extra cup of koolaid.

Sadly, the value of music currently is mostly maintained by the existing system, and not by the "future is free" system. If we reach a point where all music is free and there is no more retail market, the value will quickly come down to match the market price.

We could end up with a marketplace with millions of average bands and average artists turning out average music, bringing the average of all music down to the level of that horrible garage band next door that practices too late when you are trying to sleep.

Value and price are not directly related, but they are connected in an elastic sort of a way. If price goes way up, it naturally will pull value up with it (trailing indicator). In the same manner, if value is lost, price is dragged down as a result. With the price at zero, the elastic is taut, pulling very hard at the value of music in people's minds.

You cannot maintain both high value and no price for very long. They are almost entirely mutually exclusive.

Re:

Re: Re:

The retail market for water is based on value of convenience and some good marketing that places bottled water as "better" than tap water (not always true).

People aren't paying for water, they are paying for benefits. It's the same reason Coca Cola costs very little to make, but retails for so much more. It's the reason you pay 5 times the price for a beer in a bar instead of drinking at home, and it's the same reason you pay more for a store bought coffee.

The value is in the service and presentation, not just the product in the container. It's an important lesson when it comes to CDs, DVDs, and books.

Re:

"Oh Blaise, the boss will be so glad that you had the extra cup of koolaid."

I suppose that's your way of making the careful and astute observation that I happen to agree with Mike about this.

"Value and price are not directly related, but they are connected in an elastic sort of a way. If price goes way up, it naturally will pull value up with it (trailing indicator). In the same manner, if value is lost, price is dragged down as a result. With the price at zero, the elastic is taut, pulling very hard at the value of music in people's minds.

You cannot maintain both high value and no price for very long. They are almost entirely mutually exclusive."

Correct me if I'm wrong, but I think you're suggesting that without a price associated to music, the corresponding value of music will be pulled down towards nothing as well. Thing is, it's only the digital audio files and infinite goods that have a price pressure of zero. There's lots of price tags on other things. So, to say it's a case of high value and no price is taking a very narrow view of the landscape. Music is more than digital audio files.

Re:

Value and price are not directly related, but they are connected in an elastic sort of a way. If price goes way up, it naturally will pull value up with it (trailing indicator). In the same manner, if value is lost, price is dragged down as a result.

There's a flaw here. You say that price drags value around, then turn around and say that value drags prive around. You can't have it both ways. It seems to me that value is the more-fixed quality; you can't make people value something more just by raising the price. When gas prices go up, people buy less gas because it's not worth that much to them. When gas prices go down, people don't stop buying gas.

Anyways, your music apocalypse, where all music sinks to the quality of garage bands, doesn't make any sense at all. Why would talented people because less talented simply because other people are bad at what they do? The Greats of the past aren't worse musicians because SOME people chose to make commercial jingles. And even if lots of people make vapid, poorly-composed music, that doesn't mean there won't be ANYONE who has something meaningful to express and the talent to do it well. And they will shine brighter for all the mediocrity around them -- and people will VALUE their art more because of the rest of the drivel being made. And when people value something, they're willing to give up their money for it; the trick is finding a way to capture that money people WANT to give you.

Re: Re:

There's a flaw here. You say that price drags value around, then turn around and say that value drags prive around. You can't have it both ways.

You have to stand back and think for it for a second. If something has no price, over time, people will have less sense of value on the product. It is "infinitely replacable", free, and thus not specifically valuable in itself. Losing it would cause you no pain, because you would be able to replace it for nothing. Even if you are a true fan of the music, being able to get it at any time for nothing would diminish your mental value for the object.

The other side of the coin is also true. Something that is highly valued but very low in price won't stay that way for long. Value drives demand, and thus demand drives up the price. It is very rare to have both high value and low price together in any one situation. If that happens, one or the other (price, value) are likely transient.

It isn't a direct 1:1 mathematical formula, it's just sort of the nature of the game.

This is why musicians need to realize they are just using another language and that, as a language, music doesn't have an inherent value.

That's where you are wrong. Even in Techduh terms, an artist can only produce a certain number of songs in a lifetime, and as such, the songs are a rarity and valuable. It is only a distribution and cultural thing that has pretty much killed all value.

Re: Re: Re:

I'm still not convinced on the Value-Price argument. A song has inherent value that doesn't depend on how scarce or hard to replace it is. Music is tied to us for emotional value, and that won't be diminished by the fact that I don't have to worry about breaking a CD or losing an authorization key. The song will not be less valuable to me because it's always available. Nor can it be "replaced" in the sense that some other song could readily usurp it's value, the way you might replace a microwave or a used bike.

Additionally, demand is not going to drive the price anywhere because, as a digital good, it's an abundant resource. If a million people download the song, it doesn't* make it less available for the million-and-first person. (There are certain technological restraints based on bandwidth and available download sources, but for our purposes these things can generally be ignored.)

Now, the language bit wasn't mine, but there's one point I want to pick at. You say, "Even in Techduh terms, an artist can only produce a certain number of songs in a lifetime, and as such, the songs are a rarity and valuable." Now, as noted, I agree that songs are valuable, but I disagree on their rarity. That is to say, a song is scarce before it is recorded -- it's "rare" in that one he could write/perform it, etc. Once it's been recorded, though, it becomes abundant because that recording can be replicated infinitely at zero cost. I don't believe this has killed value, as the song has value (or not) based on it's own intrinsic qualities. The point is, if you want to "sell" music, you have to sell the creation of music, since that's scarce, not copies of recordings.

Re: Re: Re: Re:

Once it's been recorded, though, it becomes abundant because that recording can be replicated infinitely at zero cost.

That to me is the common Techdirt mistake. Replication in and of itself doesn't change the rarity of the song, only of copies. All the duplication in the world won't create a single extra Frank Zappa song (RIP Frankie!). His songs are rare because there won't be any more of them ever. You an duplicate them until you are blue in the face, but you haven't made the music any less rare.

That's the key - the value you see in music is because of this rarity.

let's put it another way, using a great icon of Techduh: Trent Reznor. Trent is a great guy, a talented musician, and has spent much of his life creating interesting music. Between 1986 or so and 2002, he created and published a total of 17 works (halo 1 through 17, 17 being the "all that could have been" live DVD). Give or take, 14 years, or about 1.2 products per year. The stuff had value because it was good, it was rare, and so on.

From 2005 - 2008, he then released 8 or 9 more items, including a 4 disc set (ghosts) and an almost uncounted amount of stuff online. While his fans enjoy the stuff, for the most part NIN / Reznor music isn't scoring all that well, not charting, not getting anywhere near the radio airplay, and generally isn't as "rare" and valuable. Counting the 4 disc set, he has released probably 4 or 5 items per year.

What he has done is oversaturate his own market. He has made his music as common as dust, and each individual tune less powerful. I'm a huge NIN fan (got 1-17 including both UK and Japanese releases), but for the life of me I can't even name a song from "the slip". There was so much material that I could not connect on any level, could not be a fan.

My feeling is that the music industry in the "free everything" world will reach this same level, where music is so commonly created and in such volume as to not be able to truly reach fans to create value for them. Over saturation of the rarity (new music) is what will really devalue music overall.

Re: Re: Re: Re: Re:

"That to me is the common Techdirt mistake. Replication in and of itself doesn't change the rarity of the song, only of copies. All the duplication in the world won't create a single extra Frank Zappa song (RIP Frankie!). His songs are rare because there won't be any more of them ever. You an duplicate them until you are blue in the face, but you haven't made the music any less rare."

Please, point me to an example of that mistake. I went through extra pains here to make a distinction between the recordings and the music. Having an "infinite good" is precisely about replication -- not creation. It's marginal cost we're talking about. Reproduction. Copying. Not creating new stuff -- that's a huge scarcity because composition takes time and talent -- and we've highlighted examples of artists monetizing it.

Saying that you can distribute and reproduce a musical recording ad infinitum (or "until you are blue in the face") doesn't mean that anyone is saying that the musical composition isn't rare.

"While his fans enjoy the stuff, for the most part NIN / Reznor music isn't scoring all that well, not charting, not getting anywhere near the radio airplay, and generally isn't as "rare" and valuable."

This comment is a bit of a sidenote, but... why is radio airplay is the metric of success for an artist who's turned to the Internet as his primary medium?

Re: Re: Re: Re: Re:

As Blaise noted, between 1986 and 2002, the main outlet for music was the radio. NIN was big back then, and back then "big" meant getting air play and making the charts. After 2005, the Internet has been a HUGE component of Reznor's art; additionally, he quit the Lable he'd been signed onto and did his own thing.

You see a correlation between fewer works and more airtime, assuming that if Trent worked less he'd make more. I see a correlation between dropping his Lable and less airtime, assuming that he's found other outlets to get his art out there. What neither of us are talking about is how much Reznor made, back then or currently. I don't think either of us know, and he's not sharing, but I think success is more about how much compensation he's getting than how high on the charts he is.

Also, I'm a big NIN fan myself, but I think it's generally agreed that while Interesting, The Slip was kind of weak. It had a few good songs (I'd vote for 1,000,000 and Corona), but nothing spectacular.

Re: Re: Re: Re: Re: Re:

You see a correlation between fewer works and more airtime, assuming that if Trent worked less he'd make more.

No, i say for the same amount of work, he would produce less material, but the material would be of better quality. Even at "With Teeth" he dropped the quality of production, dropped the quality of song selection, and generally the material became weaker. That was actually the first CD that I didn't enjoy all of the songs enough to play though the whole recording. When I start getting busy on the skip button, I know something is up. The material from there out has been effectively forgettable. Lots of it, but nothing of true substance or durability.

Airplay is still a metric as one of the ways to reach a wider audience. It isn't like radio suddenly got turned off or anything. But basically the material generally isn't radio friendly, it isn't super hits, and as you mentioned, outside of 1,000,000 and maybe Corona, radio generally didn't touch the album very much, and they have pretty much ignored all the other work.

With so much work coming out, and most of it in a very raw and unfinished state, it has been hard for people to get a grip on his work. Yes, like some, he has become an internet darling, attracting fans I think more often for his ideals about music rather that the music itself. Many of the existing NIN fans that I know are pretty much disconnected at this point, and don't assign much mental value to the newer stuff, as it seems a little slapped together, perhaps.

@Blaise: The mistake is in looking too closely at the distribution only to assign both price and value. The ability to reproduce doesn't change value or cost to produce the work, only at best the end delivery costs. Essentially, if it takes a year to produce an album (write, record, produce, package, etc), that year is a cost to the artist. Those marginal costs are only a small part of the overall costs of music, and for that matter the value of it as well. To tell an artist that they can no longer make a living only by writing and producing new material because the world has learned how to steal it seems a bit odd.

Basically, the costs and the value are both still there, but being massively ignored. In a sea of free music, that value gets dragged to zero in a sort of elastic effect, in part because the ability to pay for the time and effort required to produce high quality content is lost. Then what we get is a sea of material that has less value (the Reznor example) which in turn loses the connection to fans and can hurt the good old RtB the other stuff that we are all suppose to pay for as a placebo for actually paying for what we would normally value.

It appears to have the potential of a vicious cycle, where less time and effort can be put into new music because more time and effort has to be put into touring, making appearances, and selling the proverbial t-shirts. This is turn leads to a bigger sea of more average content, which is turn leans the old CwF part of the deal, which in turn hurts the RtB, which takes money out of the process of making new music because more time and effort has to be put into touring, making appearances, and selling the proverbial t-shirts. This is turn leads to a bigger sea of more average content, which is turn leans the old CwF part of the deal... I think you get the idea.

Ask yourself: Would you be a better musician or take your time to produce better new songs if you didn't have a day job, or you weren't at school all the time, or didn't have to write your graduate thesis, or punch a clock?

Re: Re: Re: Re: Re: Re: Re:

"The ability to reproduce doesn't change value or cost to produce the work, only at best the end delivery costs. Essentially, if it takes a year to produce an album (write, record, produce, package, etc), that year is a cost to the artist. Those marginal costs are only a small part of the overall costs of music, and for that matter the value of it as well."

So, of course you want to recoup your expenses, but to think that the price will float way up above the marginal cost of reproduction because of high fixed costs is to ignore some economic fundamentals. It's disconnected from reality.

"To tell an artist that they can no longer make a living only by writing and producing new material because the world has learned how to steal it seems a bit odd."

That would be odd... which is why I never said that. Writing a producing new material is a scarce offering -- that takes time and talent. But artists haven't made money that way over the past few decades anyways. They've made money from selling copies of what they write and produce, by distributing in containers to fans.

I'm suggesting that relying on income from the distribution of containers doesn't make sense when those containers are now digital and have a marginal cost of essentially zero. That's a shaky foundation for a business model. Distribution is no longer a scarcity in most cases. So, look to other scarcities around writing and producing an album, like the artists who've solicited funding from their fans in advance of the creation process.

"What we get is a sea of material that has less value (the Reznor example)... It appears to have the potential of a vicious cycle, where less time and effort can be put into new music because more time and effort has to be put into touring, making appearances, and selling the proverbial t-shirts."

I don't agree with you on the Reznor example. You can say his latest stuff isn't as good, but that's subjective. Certainly, a lot of fans have been supportive. I do agree with you though that there wasn't anything outstanding, imho, on The Slip (but I still like it). But it's a huge leap to say it's quality is because of the new business model. Correlation doesn't imply causation. Artists are often inconsistent with their art. You can't just automatically attribute any weakness in the album to its business model.

About focusing on art versus worrying about the business side of things, that's always been and always will be a problem for artists. This doesn't change much. It's more time that needs to be spent connecting with fans, instead of sucking up to labels and schmoozing with industry execs. Though, I'd argue that connecting with fans around the music is in much closer to proximity to the art than schmoozing with the industry power brokers... but no one's claiming a utopia where artists can make money without trying.

Re: Re: Re:

"You have to stand back and think for it for a second. If something has no price, over time, people will have less sense of value on the product. It is "infinitely replacable", free, and thus not specifically valuable in itself. Losing it would cause you no pain, because you would be able to replace it for nothing. Even if you are a true fan of the music, being able to get it at any time for nothing would diminish your mental value for the object."

Your viewing such a narrow slice of "music." That digital audio files are "infinitely replaceable" doesn't mean that no one is paying money for music, they're just paying for scarce offerings associated with music rather than the abundant ones. Your argument about price dragging the value down only seems remotely plausible if you disconnect digital audio files from the rest of the music ecosystem.

Music is a Shared Language

I think the idea of value attached to music in any way is ludicrous. The intrinsic element of music is the idea that it is a form of shared communication. Music is another form of language that speaks in notes rather than letters. Saying music has value just because it exists for us to hear would be like stupidly trying to apply a price tag to the English language and expecting anyone to pay whenever someone says the words "That's Hawt" (I know, I know).

It's not so much the music that has value but the message contained. Just like I can add value to my language by turning the words I use into a book, I can add value to music by collecting the musical ideas into a song. Now if I were to just speak the words in a book to anyone out in the world, the value wouldn't be apparent, but the moment I take the effort to collect those words into a book, an element of value is added.

This applies to music more-so. The moment that a songwriter sits down and collects musical ideas into a song, they are changing that language into a collection of ideas, much like pages in a book. A whole album is just one giant, multi-chaptered book.

With that in mind, would I pay for a book that was just a bunch of printed sheets from some guy's computer? No. Just like I won't pay for a recording of some guy's song he did in garage band. You need the RtB factor. A book that is packaged nicely will be purchased far more readily than a book without any flourish. Would you pay for a signed, hand leather-bound copy of a book from your favorite author? Sure you would. Would pay for him just xeroxing a bunch of paper and mailing it to you in a baggy? Maybe if you're a super-fan but that's not going to get new buyers.

This is why musicians need to realize they are just using another language and that, as a language, music doesn't have an inherent value. I find that if you think of an album as a book it suddenly becomes more challenging to add value to something you thought was valuable the moment it was recorded. The industry has ingrained this sense of entitlement into musicians that expect anything they record to have value and that they should be paid for it handsomely and without recourse.

Music never had value, it was the packaging that has always given it value. From Mozart's performances to the Compact Disc, the music packaging itself was the RtB until it no longer suited society.

Re: Music is a Shared Language

"The intrinsic element of music is the idea that it is a form of shared communication. Music is another form of language that speaks in notes rather than letters...

It's not so much the music that has value but the message contained. Just like I can add value to my language by turning the words I use into a book, I can add value to music by collecting the musical ideas into a song..."

Well, I'd say that languages, like English or music, are valuable because you can use them to express an idea or emotion. But yeah, I agree that the real value from a music fan perspective comes from some other connection with the music.

And the music-as-language element is yet another ambiguity with the word music: language, composition, performance, recording, digital audio file... so many different scarcities and abundances in each of the layers.

To simplify

I'm really trying to get my mind around this stuff...but I'm a simple guy, so let me see if I can summarize this simply: In the case of music, I pay $0 for the song, which I value (the song which I "connect" with and "embrace") because it is not scarce as a result of easy means of distribution and reproduction. Yet in order to support the artist, I pay $10 for a tote bag, autograph or T-shirt, which I value not nearly as much as the song, because they are scarce? Basically, as a result of this support-by-proxy-purchase, I am still paying a higher price for the thing I value - the song - but I have to get crap in the mail to do it.

I'm not trying to be smarmy, but so much of these conversations seem to boil down to paying nothing for the thing people actually want, and instead buying something you don't necessarily want in order to support the artist who produced the thing you actually value. Again, I KNOW I'm oversimplifying, but that's tough for markets and businesses that aren't driven by some kind of personally connected fandom. Explain to me how that would work for a B2B?

Re: To simplify

Re: Re: To simplify

Once I make the pizza, you can have as much as you want (as can everyone else). But I'm not making new pizza until I'm paid for it. If I've already been paid to make a sausage pizza, what do I care what happens to it? Also, if you want me to make fresh pizza, you'll need to pay additional for that, and only so many people can get it while it's fresh (there's only so much room in my shop).

Once I make a song, you can share it as much as you want. But I'm not making a new song until I'm paid for it. Once I've been paid to make a particular song, what do I care what happens to it? Also, if you want me to perform live music, you'll need to pay additional for that, and only so many people can enjoy a live performance (there's only so many seats in a venue).

Re: To simplify

You don't actually have to buy any of the trinkets, either. Only if you want to. The people who want them will buy them. If it turns out to not be enough people, then the model didn't work. Hopefully musicians are smart enough not to jump straight into dependency on such income before they know whether it will work for them or not.

As far as this:

that's tough for markets and businesses that aren't driven by some kind of personally connected fandom

For anything that doesn't have "fans" in the way music does, these suggestions should be viewed more analogically. Look at it more abstractly. Do you have something that is actually (rather than artificially) scarce and a person/organization who wants it enough to pay for it?

Re: Re: To simplify

Even funnier is that as Mike works to tear down the music industry, companies like Live Nation as just walking in the back door, and offering "360 deals" where the label profits massively from EVERYTHING that could be part of the fandom, leaving the artist with even fewer options outside of their deal. While it looks good on paper for some artists who are getting really big contracts, the reality is that it may end up locking even more of them into deals that are not profitable to the artist themselves.

Re: Re: To simplify

Actually, if it turns out to be not enough people, the ARTIST failed, not the model. Either they didn't offer something people wanted, or they just weren't that good. If you're selling something no one wants, you'll fail.

Not sure what you mean by "anything that doesn't have fans the way music does." I mean, there are fans of authors (Stephen King, Neil Gaiman, John Hodgman), and there are fans of software companies (Bioware, Blizzard, Google), and there are fans of actors (Sean Penn, Niel Patrick Harris, Christian Bale). There are even fans of directors/producers (Joss Wheadon, Peter Jackson, the Wachowski brothers). I guess no one's really a "fan" of, say, Verizon or Baltimore Gas and Electric, but they offer a tangible service so I doubt they'll be affected by abundant markets any time soon. (Of course, I know people who are violently loyal to Verizon or Apple, to the point that they make financially-suboptimal choices, so maybe that counts as being a "fan"...)

Re: To simplify

Actually, you SHOULDN'T buy something you don't want. If you want to support the artist, and they're smart, they'll either offer you something you do want to buy or let you give them money directly. There's no reason for them to not sell you a CD, just because the tracks are free, for example.

The idea isn't "how can we get music for free," but "how do we deal with music being free." Because music IS free. On the pessimistic side, you're music is being pirated and you have to address that -- threatening your fans probably isn't a good idea. On the other hand, piracy aside, if other bands start doing this (and they are), THEIR music is free, so how do you compete with them? They're getting a lot more exposure than a band who requires an upfront fee for the privelidge of their music.

Re: To simplify

"In the case of music, I pay $0 for the song, which I value (the song which I "connect" with and "embrace") because it is not scarce as a result of easy means of distribution and reproduction. Yet in order to support the artist, I pay $10 for a tote bag, autograph or T-shirt, which I value not nearly as much as the song, because they are scarce?"

Well, no one's saying you can't pay for the song, but it's that (a) the digital audio files are going to be available for free, or (b) you're going to pay for associated scarcities involved with getting the songs/files.

So, you might first encounter the music through a free download or streaming service, or by getting it off a friend. Then, you might end up paying for a CD (a physical container and distribution mechanism for the songs), or paying to be part of a fan club that gives you immediate access to a ton of digital audio files. Or all of the examples that SomeGuy mentioned of paying for the music. And, sure, you might not buy the album you've just downloaded, but you might buy the next one (or the other ones). Or you might not join a fan club right away, but after you've downloaded the music, enjoyed it, attended a concert, etc...

Merchandise (e.g. tote bags, t-shirts) is just one category of scarce goods. "Scarce goods" also refers to all of the other scarcities you could give people a reason to buy into that may be much more directly connected with the music. (Again, see SomeGuy's examples.)

Re: Re: To simplify

Blaise, thanks for your patience. Your last few lines make a lot more sense to me, though I think they are at odds with what is often espoused here on ol' TechDirt: "No one's saying "don't sell music." I'm just explaining why you don't need to rely on selling digital audio files (since that's risky business)."

Re: Re: Re: To simplify

Hey Bob,

Yeah, I'll agree that Techdirt may often say "don't rely on selling music" (slightly different than "don't sell music"), but I think that, if you understand the economics of abundance thing, you realize that what's meant by "music" is often "digital audio files" -- that's the main abundant good. But, agreed, the wording is often ambiguous. It's common in conversation to speak of "music" when we specifically mean "digital audio files," so the same thing often happens when writing about it.

Re: Re: Re: Re: To simplify

You're spot-on. Some of what I react to on TechDirt is what appears at least to me to be this black and white notion of smartness versus stupidity (as Mike likes to say). "Paywalls are bad." "Free is good." "It's smart to do xxx." "It's dumb to do yyy" I think there is a lot of gray area, and many valid and valuable hybrids yet to be tried or even invented. Thanks for your thoughtfulness.

Re: Re: Re: Re: Re: To simplify

"Some of what I react to on TechDirt is what appears at least to me to be this black and white notion of smartness versus stupidity (as Mike likes to say). "Paywalls are bad." "Free is good." "It's smart to do xxx." "It's dumb to do yyy" "

I agree with almost everything Mike writes on Techdirt. I can see how you might react to some of those comments as black and white, but, imho, Mike does understand the nuances. Like, check out this article from his 2007 series on the economics of free: Recognizing That Just About Any Product Is A Bundle of Scarce And Non-Scarce Goods. That level of detail might not make it into every short Techdirt writeup, but when I read "give the music away for free," I read it against that backdrop. He means the digital audio files. I think the detail is there over time, or if you dig through the backlinks in each article.

"I think there is a lot of gray area, and many valid and valuable hybrids yet to be tried or even invented."

I don't think a hybrid model that depends on artificial scarcity will be all that reliable, but, sure, there are lots of scarcities you can find, lots of different ways to set up a model.

Great work!

Thank you Blaise! Your work inspired me to write about you at a blog that I contribute to on a daily basis called The Technology Cache (link at bottom if interested). I've been a fan of the FSF and dissolving the digital divide for quite some time. Although you've presented the business benefits of a "free" approach, I'm also interested in how the western concept of "intellectual property" does actual damage to less fortunate societies.
As a lifelong software engineer who's now an open-source/free software advocate, I'm always researching to learn more about equitable ways to encourage a world of sharecropping where those who contribute are rewarded and those who rely on the artificial creation of scarcity find themselves forced to... actually contribute :)
Here's the link just in case you're interested: http://www.perkiset.org/forum/freemem_garbage_collection/free_doesnt_mean_devalued-t2125.0.html;msg1 7512;topicseen#msg17512
Best regards,
Adam

Re: Great work!

Hey Adam, thanks for the link! I've been an associate member of the FSF for the past two years, big supporter of free software and free culture. I focused on free as in price here, but I intentionally left the title and conclusion ambiguous. I think a free-as-in-freedom approach to art is one of the best ways to add value... trying to put that into practice with my own music, but I'm still in the early stages.

Re: Re: Free Doesn't Mean Devalued

Firstly, trying to make a convincing argument about economics based on aphorisms is... well, not convincing.

TANSTAAFL (there ain't no such thing as a free lunch)
You get what you pay for

These sayings are based on scarcities. Some things are scarce and you have to pay for them. Some things are abundant and you can get them for free. Some things are extremely important and valuable, but relatively abundant and very very low priced (tap water).

If a deal seems too good to be true, it usually is
Caveat Emptor (buyer beware)

What do these have to do with value vs. price?

Selling/Buying a pig in a poke

Never heard of that one.

All of these commonplace sayings point to a distinct link between price and value, usually as price being the best indicator of little or no value for the goods being offered.

Given a particular finite level of supply, yes price will go up based on demand (how much buyers value the good). But if supply is infinite, price will be zero no matter how high demand is. So in that case value and price are disconnected.

Charity Hilarity

This is an encouraging article for those of us who are fully aware where Art is going--yet we're dragging our feet nonetheless. I firmly believe that Art is FREE and audience is priceless--however alternative revenue streams must embody the new model to perpetuate Art and sustain Artists. The idea that consumers are searching high and low to find something they most definitely value for FREE rather than but it for $1.99 is my case in point; consumers know the value in what they're getting, and some are actually willing to DONATE more to the Artist than they would have been willing to pay for the product. Now consider the time one might spend to locate the FREE product and the value of their time spent and one might conclude the value of FREE has everything to do with principle and nothing to do with cost. Miles Maker Writer/Director of "Brown Baby" (2010) The totally FREE movie you can share, remix, re-use and rediscover! DONATE on IndieGoGo: http://www.indiegogo.com

Good luck panhandling!

Maybe one day you'll scrounge up enough pennies and nickles for a chair and a strong rope!

They won't continue to be scarce

When you give music away and connect with an audience, the opportunity for monetization is in the associated scarcities -- access, containers, community, merchandise, relationships, unique goods, the creation of new music, etc. -- by giving people a reason to buy.

What I anticipate is that as millions of musicians begin offering all of the above, none of the offerings will stay scarce. Every artist will have some variation of the above and the market will be flooded with every possible combination of access/containers/community/merchandise/relationships/unique goods/etc. Every music website will become a virtual catalog of offerings.

Re: They won't continue to be scarce

What I anticipate is that as millions of musicians begin offering all of the above, none of the offerings will stay scarce. Every artist will have some variation of the above and the market will be flooded with every possible combination of access/containers/community/merchandise/relationships/unique goods/etc.

"Scarce" has a different meaning in economics. It doesn't mean rare, it means there are only so many of them. So even if there are 50 million of these things, that's still a finite supply, and it costs money/time/raw materials to make more. That makes them scarce. As compared to an MP3 file for example: we can have however many of those we want for essentially zero cost. It is not scarce, it is abundant.

Re: Re: They won't continue to be scarce

Also, there's more differentiation that isn't being accounted for. Access to Artist A isn't the same as Access to Artist B. So you won't have "50 million of these things", you'll have a number of different artists offering similar but differentiated products. It doesn't matter if there are 50 million "limited edition box sets" if I'm only concerned with a pool of 250.

Re: Re: Re: They won't continue to be scarce

Let's follow this through.

There will be millions of musicians out there putting out free music. Each one will be looking for ways to attract their hardcore fans. They will ask you to listen to their music. You will likely be invited to view millions of websites, listen to millions of tracts.

They will hope that you buy something from them and will send you requests.

On MySpace they would send bulletins, event announcements, post on your comments board.

Now I am starting to get so many event notices on Facebook, I rarely look at those now either.

Every technique that works for a band will be duplicated many many times by other bands.

If a particular merchandise design becomes popular, there will be knockoffs. Someone in China will produce multiples of anything that is popular. So if you like the design and want a cheap copy, you'll find it.

Even the live experience can be copied to some extent. There are tribute bands. There are bands that incorporate similar sounds. For example, now there are lots of bands with cellos. And so it goes.

Of course, a limited number of truly inspired, gifted performers will succeed. But the millions of aspiring bands who hope to make a living at this will find it a tough go because they are one of millions. Everything they do is likely to blend into the mass of other artists doing something similar.

Re: Re: Re: Re: They won't continue to be scarce

Welcome to the reality. When things are not done before, they stand out and are unique. When everyone does them, they are meaningless.

"selling scarcities" is a nice thing until everyone has too many t-shirts, too many posters, and have played too many miniputt games. Then you are back at square one: The only thing of true value is music, and you are giving it away for nothing.

For the most part, the scarcities described on Techduh are pretty much artificial scarcities. Consider this one:

The scarcity is entirely artificial. There is the ability to produce effectively an infinite number of these shirts. By cutting production at a certain day, an artificial scarcity is created. However, if any one of the people who buys those shirts them has it reproduced in bulk (minus any techduh logos), it is as scarce as snowflakes in an Alaskan winter. Now you paid a whole bunch of money for something that is as common as dirt.

Artificial scarcities have at best transient value. Amusing t-shirt today, window washing rag tomorrow. Yet the songs, well, you might listen to those all your life. Amazing what really has value, and it is why much of the CwF thing is junk science, because it's selling what isn't really valuable, and giving away what people truly do value.

With a million crummy bands trying the same techniques, the music scene will likely degrade quickly into a sea of dull, probably to be replaced by variations of Live Nation acts.

Re: Re: Re: Re: Re: They won't continue to be scarce

By cutting production at a certain day, an artificial scarcity is created. However, if any one of the people who buys those shirts them has it reproduced in bulk (minus any techduh logos), it is as scarce as snowflakes in an Alaskan winter. Now you paid a whole bunch of money for something that is as common as dirt.

A lot of the topics on Techdirt seem to rail against copyright and other forms of protection.

So let's assume not only do competitors produce knockoffs, they include the logos too. They produce exact copies and flood the market. If it's a popular design, everyone can get one, either from a street vendor, or at Costco.

Re: Re: Re: Re: Re: Re: They won't continue to be scarce

The AC you commented to agrees with you. AC there agrees with your apocalypse. I and many others here don't. AC there ignores the fact that it's not just about buying a t-shirt or box set, it's about supporting the artist. If you can't get fans who want to support you, you've already failed.

As far as using logos and whatnot, if you have loyal fans, all you have to do is say "that's not me." If nothing else, despite "railing against" copyright and similar, we support false-advertising laws, so it's not like we're out to kill ALL protections.

Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce

"The AC there ignores the fact that it's not just about buying a t-shirt or box set, it's about supporting the artist. If you can't get fans who want to support you, you've already failed.

Why bother to sell the t-shirt? Why not just ask for the financial support? Or why not just say, "If you like my music and would like to support it, perhaps you'll buy a CD and also buy some for your friends."

If the point is support, which I think is a great thing, why should musicians take time away from creating music to find other things to sell? Just offer the music and ask that fans contribute money to hear it. All the other stuff is unnecessary and takes them away from what everyone wants them to do, which is music.

Re: Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce

Because some people want to buy t-shirts?

You make a valid point, but I don't think such side-projects have to take away from the creative process. Trent Reznor and Jill Sobule have done some interesting things that he helped them connect with fans and have had neutral or positive effects on their "making music" bits.

Re: Re: Re: Re: Re: Re: They won't continue to be scarce

So let's assume not only do competitors produce knockoffs, they include the logos too. They produce exact copies and flood the market. If it's a popular design, everyone can get one, either from a street vendor, or at Costco.

Sure. If they want to they can. In fact, someone has already starting selling knockoffs of our t-shirt, and I actually think it's a real tribute. Very cool.

But the point is that anyone buying those knockoffs don't have a real connection with us. We're still selling a ton of t-shirts, not because of the t-shirt, but because people like having a connection with us. If you can't understand the value of that connection -- which is not the content and is not the t-shirt -- then you shouldn't be in this business.

Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce

But the point is that anyone buying those knockoffs don't have a real connection with us. We're still selling a ton of t-shirts, not because of the t-shirt, but because people like having a connection with us. If you can't understand the value of that connection -- which is not the content and is not the t-shirt -- then you shouldn't be in this business

And I am suggesting that you don't need to sell "stuff" to promote the relationship. Just asking for donations or for people to buy music should also suffice if people are buying in order to support the artist.

I'm just trying to clarify their motivations. If they want the t-shirt, they can buy it directly or buy a copy.

If they want to help the artist, they can just give money, if they so wish.

Re: Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce

And why do they want to own it? They want it to illustrate to others their taste and identify who they are as a person. I also believe they want to be part of something bigger than themselves, they want to belong... Ownership then becomes a way of them supporting your community through investing in that community

The tip jar thing helps, but owning the t-shirt here serves as a sign of the connection, like a badge of membership in the community, something that's visible to others.

Re: Re: Re: Re: Re: Re: Re: Re: They won't continue to be scarce

And I am suggesting that you don't need to sell "stuff" to promote the relationship. Just asking for donations or for people to buy music should also suffice if people are buying in order to support the artist.

I don't think so. I mean, sure you can just ask for money, but that's not a transaction. That's begging. And it doesn't last. By actually selling a product, the person is getting back something they value, and they're able to look forward to future products as well.

Re: Re: Re: Re: They won't continue to be scarce

Of course, a limited number of truly inspired, gifted performers will succeed. But the millions of aspiring bands who hope to make a living at this will find it a tough go because they are one of millions.

This is nothing new, but because it's not happening behind closed doors, you'll see more of it.

On MySpace they would send bulletins, event announcements, post on your comments board.
Now I am starting to get so many event notices on Facebook, I rarely look at those now either.

But I bet you still keep in touch with your friends and keep up with things you care about. I get reams of spam every day, but I don't quit talking with my college friends. So, what's your point?

So if you like the design and want a cheap copy, you'll find it.

And if they want your music for free, they can find that, too. It's not enough, and never really has been, to just offer something for sale. You need to give people a reason to buy. But that's still only half of it; you need to connect with people so that you can make them fans. Fans don't just want the t-shirt for cheap, they honestly want to support the musician. That's key to making this work.

For example, now there are lots of bands with cellos. And so it goes.

And this is nothing new. Similar bands with similar sounds have existed for as long as there's been music. It's competition. The good artists will do well. The mediocre artists maybe won't be able to sustain themselves, and the bad artists will go away. even at that, just because I like one band doesn't mean I'll necessarily like a sound-alike. and maybe I will. Again, I'm not sure where you're trying to go with this.

Everything they do is likely to blend into the mass of other artists doing something similar.

If you don't stand out an differentiate yourself, you'll die. I don't see how that's different from the way things are today, or why it's even a bad thing. At the very least, musicians can now go directly to the public to succeed or fail, rather than trying to convince a Big Lable gatekeeper before they get a shot at it. I predict that this will lead to more diversity, not the bland future you see. There will be fewer Backstreet Boys and over-processed pop because they won't have corporate backers to keep them alive.

Re: Re: Re: Re: Re: They won't continue to be scarce

This is nothing new, but because it's not happening behind closed doors, you'll see more of it. ...

And this is nothing new. ...

I don't see how that's different from the way things are today, or why it's even a bad thing. At the very least, musicians can now go directly to the public to succeed or fail, rather than trying to convince a Big Lable gatekeeper before they get a shot at it. I predict that this will lead to more diversity, not the bland future you see.

You are making my point. It's just as hard to make a living in music as has always been. There's a lot of competition out there. People will stay in touch with their friends who make music and support them. Just as it has always been. There have always been local musicians who play to their friends and family.

That's the world of music that I see. Music is about creativity, self-expression, community. It's much harder to actually make money at it.

All I try to do is to set realistic expectations for musicians. Play music because you love to do so.

Making a living at it is a whole other ballgame and it will be very difficult. If anything, more artists are being told they can succeed so there will be more trying. The fantasy DIY model has replaced the fantasy get-signed-to-a-label, but both are difficult to achieve successfully.

You are saying that what is happening in music today is what has always happened. Bingo. My point exactly.

Re: They won't continue to be scarce

I think I tenatively agree with you. But only tenatively. In the past, a really talented local band still hat to win the lottery to get signed to a Lable, and at that point they were probably f'd over, because it's either sign or stayb local. The lables had all the power. That's not the case any more. A talented band in Seattle can be heard WORLDWIDE at almost no cost. The trick, and what we talk about here at Techdirt, is how to capture and take advantage of that free exposure.

I don't think it'll be easy. And I'll admit, I'm not sure we'll have megastars like Jackson, Bono, and The Beatles (but i'd argue that's not much of a loss). I think MORE people will be able to make a living at music because exposure and distribution will be easier, less expensive, and not reliant on the Lables.

I agree that artists should play for the love of it, and that DIY isn't necessarily easier than the old lottery, but it's better for the artists (who retain the power, rather than signing it away) and it's better for consumers (who get to be exposed to more and better and more-diverse music). I see a bright, bight future ahead.

Re: Re: They won't continue to be scarce

I agree that artists should play for the love of it, and that DIY isn't necessarily easier than the old lottery, but it's better for the artists (who retain the power, rather than signing it away) and it's better for consumers (who get to be exposed to more and better and more-diverse music).

And I will take that a bit further. If we tell artists to make the music they want to make, without regard to whether it will sell and whether they can make a living at it, they will be happier.

By decoupling the idea that making music leads to paying the bills via music, people can be free to pursue that activity which is the most financially rewarding, and to pursue music that is the most creatively rewarding.

Re: Re: Re: Re: They won't continue to be scarce

"What I anticipate is that as millions of musicians begin offering all of the above, none of the offerings will stay scarce."

SomeGuy offered some useful comments already, but I'd also point out that there's no functional equivalence in art. No matter how many female, folk/pop singer/songwriters there are in the world, no one will replace Robyn Dell'Unto in my heart and in my mind; nothing will substitute for the connection I've made with her music.

But, Suzanne, I do think you have a point. The whole democratization of the tools of production and distribution thing also means that musicians are competing with each other more and more.

"The fantasy DIY model has replaced the fantasy get-signed-to-a-label, but both are difficult to achieve successfully."

I like that line, and I'll tentatively agree with you too. Anyone looking for a get rich quick scheme or seeking to be a megastar is going to be just as disappointed.

But I do think there are some ways in which the Internet really does offer some hope (modest hope though -- not necessarily for the wannabe megastars). A band in Seattle can be heard worldwide, but that doesn't mean the world will hear them. But it does mean that it's much more likely for a handful of people to hear them and connect with the music.

I haven't put out any polished recordings of my own music yet, but I've received a handful of totally random emails of support: one from Israel, one recently from a girl who found a Christmas carol recording a did through beemp3.com (a site I've never even heard of). The hope, at least from my perspective, is not that you'll be known worldwide, but that you can build a modest contingent of fans across the globe.

Like, take a look at open source software development. I've been working on the Creative Commons Drupal module. The Internet hasn't made me famous or provided the project with thousands of developers (i.e. open source doesn't mean the Linux kernel), but I've got a grad student at CMU and someone from Denver hacking on it, and users from Spain, Denmark and the States installing it and trying it out. *shrugs*

"Now I am starting to get so many event notices on Facebook, I rarely look at those now either."

I can relate. I've always got 15-20 events in the queue. But I'm increasingly convinced that connecting with fans needs to be more personal... not that the artist needs to be personally involved with every connection, but that you need to connect with individuals, not masses. You need your music to resonate with an individual so that they become a fan. I'm interested in the parallels between "connecting with fans" and evangelization, but that may just be the aspiring theologian in me...

Re: Re: Re: Re: They won't continue to be scarce

Every technique that works for a band will be duplicated many many times by other bands.

Again, how insulting that you think that musicians are so stupid as to just copy. Sure, some are, and those will fail. But many musicians are *creative* people who are quite good at coming up with creative new ideas. There is no shortage of new ideas, and it's really rather insulting of you to suggest that there aren't any and that the artists you know won't be able to come up with better ideas.

If a particular merchandise design becomes popular, there will be knockoffs. Someone in China will produce multiples of anything that is popular. So if you like the design and want a cheap copy, you'll find it.

Again, but those knockoffs won't have value to consumers. I don't see why this is so complicated for you.

ven the live experience can be copied to some extent. There are tribute bands. There are bands that incorporate similar sounds. For example, now there are lots of bands with cellos. And so it goes.

Again, I'm frankly amazed at how insulting you are to musicians. There are tons of bands that copy my favorite band's sound, and none of that takes away from my favorite band remaining my favorite band. Do you really think people are so stupid?

Of course, a limited number of truly inspired, gifted performers will succeed. But the millions of aspiring bands who hope to make a living at this will find it a tough go because they are one of millions. Everything they do is likely to blend into the mass of other artists doing something similar.

I'm at a music conference in Norway as I type this, and the exact opposite of what you say is what's happening. I'm talking to label guys and they're raving about how many of their bands can now make a living, rather than having to find day jobs. They're connecting. They're doing creative work. Their entire business model is changing. They can now support many bands earning a good living, rather than rapidly hope for one out of many to hit the lottery.

Re: Re: Re: Re: Re: They won't continue to be scarce

Again, how insulting that you think that musicians are so stupid as to just copy. Sure, some are, and those will fail. But many musicians are *creative* people who are quite good at coming up with creative new ideas. There is no shortage of new ideas, and it's really rather insulting of you to suggest that there aren't any and that the artists you know won't be able to come up with better ideas.

A few years ago I looked at the top 6000 Colorado bands on MySpace based on the number of friends. I quit after that when my eyes glazed over with too many pages featuring blood, skulls, and devils. Most of the bands on MySpace aren't all that exciting, but that is the music business today.

When you say that musicians can make it, these are the people you are talking to. These are the kids who will copy any ideas that appear to be successful.

The music business is also everyone who tries out for American Idol.

The music business is all the local bands that play in their local bars and invite their friends. My ex-husband was a full time musician for awhile a number of years ago. His punk rockabilly band played in cowboy bars and when the crowd got rowdy, they threw beer bottles at the band. That's the music business.

You guys cite a handful of musicians and use them to say how there will be lots of middle class musicians making a full-time living at this. Keep the examples coming. I'd love to see a list of 20,000 artists who each have their 1000 fans and are grossing at least $100,000 a year. Definitely keep sharing their names with us. How about starting a website listing them? It would be very cool and quite helpful. Not just a handful of artists, but the thousands who are doing this. It should be easy enough to compile it. Just ask for people to send in suggestions. Hypebot tried, but didn't get very far.

I know people will play music. I'm advocating that everyone gets involved. I think that will mean there may be less money for individuals, but I think more people will be happier because they will be doing it for the right reasons. Join a choir. Compose something. Make a video. Participate in a flash mob that dances in the middle of the street. No matter the talent level, give people something to do that will make them feel creative. Everyone can be a part of the music business.

Price might not equal value, but the perception of price does influence the perception of value.

I once read an account of a guy who bought golf club components and assembled them for customers. He made really good, custom fitted golf clubs. When he first started out, he only charged around $200 but he didn't get many customers. He actually raised his price to around $500 (still a few hundred dollars or more less than the name brand clubs)and he became a very busy club maker.

Would you buy a suit for $75? How much convincing would you have to do to get a professional to even consider a $75 suit?

Price does relate to value, because perception becomes reality.

When you talk about the actual music being free and making money off of other things, if you ignore copyright and patents, what are the other things? Shirts won't do it, because someone will be able to sell those shirts cheaper. I guess it will only be things that will require the person actually showing up, maybe they could do house parties.

Box sets? Others could put together better things at cheaper prices.

Your race to zero doesn't end well for artists. That thinking turns everything into a Walmart mentality. Oh well, you will reap what you sow.

Re: Price perception

I had a consultant tell me that as he got busy he began to raise his hourly prices to drop the lower paying customers. As it turned out, as his prices went up, so did the number of clients wanting to hire him.

He was perceived as more valuable the more expensive he got.

I think because there is a glut of free music, it isn't valued as much as it used to be. Digital music has become disposable. I'm not advocating that we charge more for it, but I think now that you can get virtually anyone's songs for free, people feel free to listen a couple of times and then move on to more songs.

Re:

"When you talk about the actual music being free and making money off of other things, if you ignore copyright and patents, what are the other things?"

We're not talking about the music being free, but the digital audio files (which can be reproduced ad infinitum). Charging for the scarcities associated with the music doesn't have to mean charging for "other things." Charging for the creation of new music is a perfect example, and artists who've done it charge a premium.

I get what you're saying about the price influencing the perception of value, but you can't divorce that from scarcity. Charging $10 for an MP3 isn't going to make people value it more. But, by all means, if the demand is there, charge a premium for the scarce components of music.

If your slice of the pie gets smaller and smaller, it really doesn't matter if the overall pie gets bigger, you still won't have much pie to eat in the end, and then you will go around with less pie than you had in the past.

Re: Re:

If the pie gets bigger faster than your slice gets smaller, you get MORE pie. And then everyone's happy.

I've been looking at disposable spending quite a bit. I'm not sure where the additional money will come from. People have hit their limit on entertainment spending. They aren't buy as many non-necessities right now. They have cut back on going out.

So I'm curious what people will cut back on in order to increase spending on music-related items?

Re: Re: Re:

If no one's spending money on music, there's no pie to begin with.

If no one's spending MORE on music, the pie isn't getting bigger.

It's true we're in economically hard times, but that's not something that any business model can fix. if no one's buying music, it doesn't matter if you're using a new modle or you're signed up to a old Lable, you're still not making money.

Re: Re: Re: Re: Re:

I dispute that it isn't there. I dispute all the ifs in my above comment. And income quotes elsewhere around here seem to support that. It's an economically harsh time, but I haven't heard of bands dissolving; quite the opposite, it seems like there are more and more bands forming. They can't all be just scraping by or some WOULD dissolve. So, somehow, I think your observations are wrong.

Re: Re: Re: Re: Re: Re:

"It's an economically harsh time, but I haven't heard of bands dissolving; quite the opposite, it seems like there are more and more bands forming. They can't all be just scraping by or some WOULD dissolve. "

There are a lot of bands where the members have day jobs. They form bands because they love to play music, not because it pays their bills.

And that's what will continue to drive music and keep costs down. People will play music for free and make it available for free. There will always be music because it's fun to do.

You can't sell T Shirts or other things like that because someone wil outsource the production of those and cut your profits down to zero. You can't sell box sets, becasue someone else will outsource those too and cut your profits down to zero.

What, we are back to the only thing that can't be outsourced, so the artists will be back to playing in bars every night.

Re:

You're still ignoring the fact that fans want to support the artist. If you don't, he can't make more music, and that upsets fans. They won't buy the knockoffs because that hurts their idol. Therefore, you can't be undercut. They want to pay YOU, not some outsourced knock-off.

Re: Re:

"You're still ignoring the fact that fans want to support the artist. If you don't, he can't make more music, and that upsets fans. They won't buy the knockoffs because that hurts their idol. Therefore, you can't be undercut. They want to pay YOU, not some outsourced knock-off."

It's the psychology of the tip system. You are supporting the artist. You don't really need to buy the goods. Buying CDs at shows is the same idea. Why not just pay $15 for a CD if you want to support the artist? You don't necessarily need to have them make t-shirts to sell. Donations, tips, sponsorship. Sure, it's done. It's a more direct way of thinking than for the artist to spend much effort on trying to sell stuff other than the music.

How about if the artist says, "If you like my music, I can really use your support. I could go into the t-shirt business, but it will take time away from my music. So instead, I'm offering virtual t-shirts that you can buy for prices between $15 and $200."

Re: Re: Re:

That's an approach that might work. Offering an actual product won't DETRACT from that and, potentially, such side projects can enhance the "connect-with-fans" aspect of things and/or coincide with the creative process. it doesn't HAVE to detract from the "making music" bit, is the thing.

But, yeah, asking for tips is one thought. Frankly, I think any artist who doesn't accept tips (and set up an easy way for them to be contributed) is being kind of silly.

Re: Re: Re: Re:

That's an approach that might work. Offering an actual product won't DETRACT from that and, potentially, such side projects can enhance the "connect-with-fans" aspect of things and/or coincide with the creative process. it doesn't HAVE to detract from the "making music" bit, is the thing.

Most artists do offer t-shirts, but it does make it a bit more complicated. You have to haul them to shows. You may want to have multiple sizes. If you are doing online sales, you have to deal with order fulfillment.

I have no problem with artists getting into merchandising. I think that developing brand extensions and cross-promotions is a good long-term strategy for some. My background is integrated marketing and I look for those opportunities.

But a lot of people got into music to create music, not to do all the side stuff. Now many of them are told that they can make a good living if they will just spend a good chunk of time marketing.

Well, maybe it would actually be more enjoyable for them to do a non-music related job that pays well and then just do music to do music. If you are going to get into selling merchandise, decide if you like to sell merchandise or if there is enough money in it for you to hire someone else to do it. If not, it doesn't mean you won't be successful in music. If you enjoy it, you are successful in your own way.

Imagine musicians on every street corner

Maybe a good visual would be to imagine that every musician has now set up to play on every available spot on every street corner.

You can't walk anywhere without hearing someone playing a song. They are lined up wall-to-wall playing their songs. Some are better than others, but they are like wall paper. They are everywhere, playing, hoping you'll listen, hoping to engage your attention long enough to persuade you to put something in a tip jar, buy a t-shirt, etc.

Let's assume that every time you step out your door, until you can find a space that isn't public, you run into musicians. How much time are you likely to spend listening to any of them? What will they need to do to get your attention and then your support?

Re: Imagine musicians on every street corner

I'm not sure your vision of the future is realistic. If they're good, they'll get support. If they're not, they won't and they'll stop. They will not wallpaper the world.

The question is this: one musician is on the street corner playing; you can hear his stuff and decide whether or not you like him, and based on that choose to give him money. Another musician hids inside and requires that you give him money first, and then he'll let you inside to hear his song but you aren't allowed to tell anyone about him and there's no money-back garontee. For the sake of argument, assume they're both of even talent and appeal. Who do you expect to get more patronage?

Re: Re: Imagine musicians on every street corner

My vision is that everyone will be a music creator rather than a music consumer. I think the audience will be sliced up so thin, and the tools will be there for everyone to feel creative, that they will enjoy making their own music. And I think the result will actually be better. Instead of stars and fans, everyone will feel creative.

The new heroes of the music world will be the ones who help others make and participate in music rather than a one-sided business where you have artists that the fans support.

Maybe everyone will have a day job that pays the bills and everyone will have a creative side than doesn't necessarily generate money for them, but enriches their lives.

The reward will be in the process rather than the consumption.

Thinking in terms of artists with fans is basically an old model. People may get more enjoyment out of creating their own music than in purchasing what others create. I've already seen that as musicians play their own shows, they have less time to go to other shows. So imagine that in every household everyone is playing music. They are happy being their own creators.

Re: Re: Re: Imagine musicians on every street corner

It's an interesting idea. I don't think it holds, though, precisely because not everyone is talented like that. I'm not -- I've tried, here and there, but my skills aren't in music performance or composition. And, based on this observation, I think we'll still see stars and fans, even if it will be on a smaller, more-personal level. I don't think everyone will have to have a "day job," but I do agree that it'll be better.

Re: Imagine musicians on every street corner

Maybe a good visual would be to imagine that every musician has now set up to play on every available spot on every street corner.

Suzanne, that assumes entirely incorrectly that there are only a limited number of things musicians can do. You again are applying a scarcity model (street corners) to an infinite market.

You can't walk anywhere without hearing someone playing a song. They are lined up wall-to-wall playing their songs. Some are better than others, but they are like wall paper. They are everywhere, playing, hoping you'll listen, hoping to engage your attention long enough to persuade you to put something in a tip jar, buy a t-shirt, etc.

How insulting towards creative people. Do you really think so little of the musicians you work with that they can't be creative enough to stand out to their own community?

Oh blaise, it is true. "Free Doesn't Mean Devalued", but devalued is what things become when they are free too long.

The only value in music right now (downloaded for free, aka pirated) is because the store has a $15 price on the CD. Remove that price, and suddenly the allure of piracy goes out the window. It's no longer cool, and what you are getting has no real value. You are no longer sticking it to the man, because the man stuck it to himself already.

Then music is devalued.

Please take a moment to learn the concept of MSRP and actual selling prices of products, and how that supports the notion of value. It's important.

Re:

what you are getting has no real value.

If you think money has no real value, I don't know how to discuss these things with you. Are you advocating that musicians are just trying to rip off their fans, tricking them into paying for something that's worthless?

Re: Re:

Are you advocating that musicians are just trying to rip off their fans, tricking them into paying for something that's worthless?

Actually, I think that it is exactly what is happening. Take a $5 t-shirt, put a $1 silk screen on it (single color) and make a "limited" number... sell them for $50 each. What's the true value here? I don't like bands because I like t-shirts (I have plenty), but rather because I like their music. If you want me to pay money for something of value, SELL ME MUSIC. It's the thing I value the most, not crappy t-shirts, logo of the day hoodies, or books I wouldn't normally buy.

Most importantly, don't hit me on the head with scarcity as value when the scarcity is artificial. Limited runs are meaningless in a no-copyright society, anyone with a bit of skill can duplicate your shirt, turn out as many copies as you like, and sell them for $10 and still make money. Your shirt is scarce because you artificially made it scarce, not because there is some sort of natural shortage of shirts, ink, or silk screen shops.

Now music? Artist might make a dozen new songs a year. Damn, they are RARE. Only so much time, only so many songs to write and record, those are truly valuable and really rare.

When we move to selling false scarcities and stop selling true value, the system is broken.

Re: Re: Re: Re:

There is no discrepency. If they continue to give music away, they will lower the value to everyone. This is doubly true if all the DIY bands and singer songwriter types are flooding the market with their dreck. By removing music as the item being sold, the rare good music will be lost in a sea of average, forever removing it's value.

The old system, music had value. The new system, music has no value and it's all about lotttttts of t-shirts. Yet without the music, who's buying the t-shirts?

What I want is some good choices of music, not a million pieces of crap that I have to wade through hoping to find good music. I want music I share in common with my friends, that everyone sings to at the local bar, that everyone dances to at the local club, that everyone sings along with at the beach. I won't get it when all my friends face the same wading through the crap mess i do, each perhaps enjoy a different song and never having anything in common again.

Can you imagine visiting a night club and the band plays music you don't know, the DJ plays music you don't know, and in fact, nobody else in the room knows, and when you come back the next time, they play entirely different music again?

Music is something that people have in common, a sea of average crap music is just going to make us into the musical equivalent of YouTube: everyone watches some stuff, very few people watch the same things, and the only "stars" to come out of it are idiots like the "chocolate rain" dude that got famous not for skill, but for being an oddity.

Seems to me to be a formula for DIY crash a burn, and the music ends up with no value to anyone.

Re: Re: Re: Re: Re:

You say that, if music is offered to free for too long, it becomes devalued. Music is only valuable if it costs money. ("The only value in music... is because the store has a $15 price on the CD.")

But then you contradict yourself: "If you want me to pay money for something of value, SELL ME MUSIC. It's the thing I value the most..."

How could you still value music the most and ask someone to sell it to you (implying that they aren't) if music loses its value when it's available for free?

By the way, I'm not suggesting people shouldn't sell music, even copies of it. If someone wants to pay for a digital audio file, why turn them down? A pay-what-you-want thing or selling through iTunes could still allow fans who really want to buy your digital audio files to do so, whether or not they're available for free elsewhere. And, by all means, sell CDs. The physical container is still pretty convenient at a live show. Most of the artists I play with still sell lots of plastic from the side of the stage.

But don't depend on selling abundant goods, or selling physical copies of the albums when the recordings are available online for free. That's asking for trouble. And don't try to stop the recordings from being available -- it's futile and counter-productive. Instead, look at all the other scarcities associated with music to build a more sustainable and complete business model.

Re: Re: Re: Re: Re: Re:

I still value it today in part because it still has some value. But when all music is all free (and it will be, if I buy the party line here), then what value is left? You are thinking of value as a one to one thing, but often the value of music is in group appreciation, in sharing, in some commonality between people.

But don't depend on selling abundant goods, or selling physical copies of the albums when the recordings are available online for free. That's asking for trouble. And don't try to stop the recordings from being available -- it's futile and counter-productive. Instead, look at all the other scarcities associated with music to build a more sustainable and complete business model.

The problem is that in itself, the "other scarcities" are not a business model mostly because they don't match the value consumers truly look for. The music is the value, it's the common thread. It's the key item. Take away the music, and you are just some guy selling t-shirts. I may not like your t-shirts, but like your music. So I get it online for free and enjoy it, and you don't get a cent.

Oh, live shows? Well, let's say I live in Fairbanks, Alaska. Remind me again how many major acts have hit Fairbanks this year? None? So effectively you toss out an entire marketplace because you can't play there. How many more market places will never be part of the business model?

In the end, the people in the major centers that get shows will end up paying for the masses to enjoy music for free. Is that really a fair and sustainable business model?

Re: Re: Re: Re: Re: Re: Re:

"The problem is that in itself, the "other scarcities" are not a business model mostly because they don't match the value consumers truly look for."

"Other scarcities" doesn't necessarily mean non-music good, but non-MP3 goods. Helping an artist fund a new album, for example, is paying for the scarcity of content creation. That's paying for music without paying for a digital audio file.

"The music is the value, it's the common thread. It's the key item."

Absolutely. Look for the scarcities most directly related to the music -- or better yet, within the music (i.e. creation of new content, an encounter or experience, relationships based on the music, etc..).

"Take away the music, and you are just some guy selling t-shirts. I may not like your t-shirts, but like your music. So I get it online for free and enjoy it, and you don't get a cent."

I'm not suggesting you sell t-shirts instead of selling scarce goods more directly connected to the music. I'm just pointing out that it's a bad idea to rely on selling abundant digital audio files (and that that observation doesn't mean that music has no value, just that digital audio files won't command much of a price). I'm not suggesting that artists only sells t-shirt -- that's a strawman.

"Oh, live shows? Well, let's say I live in Fairbanks, Alaska. Remind me again how many major acts have hit Fairbanks this year?"

Live shows can make sense for some artists. Selling digital audio files or not doesn't make Fairbanks any less remote. But, take advantage of the fact that you can get your music to Fairbanks through the web without having to travel there? Hell, post video from your concert to YouTube or stream it live or something. Connect with fans in Fairbanks, and they'll be more likely to buy other scarce offerings that aren't so location dependent -- membership in a fan club with immediate access to certain things, deluxe edition physical containers for the music, merchandise, a chance to help fund a new album... Come on, there are lots of scarcities that aren't as location-dependent as live shows and aren't as distant from the music as t-shirts.

Re: Re: Re: Re: Re: Re: Re: Re:

Blaise, in the end, you just don't get it:

All the scarcities are not valuable. What is (or was) valuable was the music. We don't connect over t-shirts or miniputt games or limited edition etchings, we connect over music. People don't come to your concerts to admire your haircut or sit around and have a drink and admire your band posters, they come to enjoy the music.

The one thing that the people want is your music, not your "stuff". In the end, there is no "RtB". "RtB" is just another way of saying "the value proposition". Stated in the old way rather than the new way, it points out the simple lack of true value in the "stuff" business.

As for things like fan clubs, I can only say this: my personal online experiences in more than 30 years (damn I feel old sometimes) is that very few people will actually make the effort. They will certainly make a bigger effort to obtain your music than they will to join a club. They want what they value, not what you wish they would value. With the CwF part of the deal (what we use to call "product placement, marketing, and direct customer contact), you are attempting to transfer their true desire, what they truly value, and put it on something else.

It may work sometimes, but the word will get out: You don't have to be a fan, you don't have to buy a hoodie, you don't have to play miniputt to get the music for free, and the rest of it doesn't really matter. Oh yeah, someone else started a free clubhouse about your band already, so people don't have to pay for that virtual thing either.

In the end, the artificial scarcities aren't anywhere near as attractive as the real product, music. Stop selling sizzle, and get back to selling steak.

Re: Re: Re: Re: Re: Re: Re: Re: Re:

You're right, I don't get it. You keep going on about t-shirts and mini-putt games, but I'm trying to stay focused on the music. You're asserting the value of music... and that's exactly what I'm doing too.

Of course it's the music that's valuable. That's the whole point of my post: free doesn't mean devalued. Music is valuable, even if the digital audio files are free.

I'm not inventing a focus on scarcity. Price exists because of scarcity, it's a mechanism for allocating scarce resources. That it disappears in the face of abundance shouldn't be a surprise. But a price of zero doesn't mean no value.

"Scarcities" are about the music. That's why they're valuable!

I have no idea what you're trying to say. You're setting up a strawman, suggesting that I think artists should just sell t-shirts or posters, and then reasserting the value of "the music" -- which is exactly what I set out to do.

"In the end, the artificial scarcities aren't anywhere near as attractive as the real product, music. Stop selling sizzle, and get back to selling steak."

Okay. What do you think artists should sell? What do you think the "real product" is? What do you mean by selling "the music?"

(And a correction: artificial scarcities are what you don't want to sell -- sell real scarcities)

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

As someone else mentioned, perhaps it's time to get back to actually selling music. The free music fad may be nothing more than a swoon through myspace, something that has come and mostly gone.

As a musician, should you not be upset that the one thing of true value you produce is stolen by everyone? (Oh, I use stolen because God Trent Reznor encouraged fans to steal music... if the term is good enough for him, it's good enough for me) The real item of value is your music, and in places you cannot play, people would under normal circumstances pay to get something valuable.

Music is the only non-artificial scarcity in the deal. Everything else (even to some extend concert tickets) is an artificial scarcity. Even concerts? Except for the biggest of acts who sell out the single biggest venue in every town, every other act selects a venue where only a percentage of their "fans" can be satisfied. If you could sell maybe 2000 tickets, you will typically be booked into a 1000 seat soft seater and that is that. The shortage of concert tickets is artificial at that point. Yes, there are limiting factors on concerts (only 1 per day typically, and only 1 city per day), but the actual shortages in a given city are often artificially generated.

So, you will never go to Fairbanks. Nobody wants another crappy t-shirt. Nobody wants a signed copy of your autobiography. They want your music. Sell it to them. CDs, digital downloads, whatever. Just as importantly, get upset when people steal your work. Don't praise them, look at them for what they are, little thieves hard at work. Ever person in Fairbanks that downloads your music off a torrent is one less person paying you.

Heck, think of it this way: If you sold enough recordings in Fairbanks, you might have the money to afford to go there and have a scarce concert.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

"As someone else mentioned, perhaps it's time to get back to actually selling music."

By that, you mean selling digital downloads or CDs -- copies of recordings. That's such a small subsection of "the music." I'm not suggesting that anyone stop selling music, or that anyone has stopped selling music. I'm just pointing out that selling the music can be a lot more than just selling copies of recordings.

"Music is the only non-artificial scarcity in the deal. Everything else (even to some extend concert tickets) is an artificial scarcity. Even concerts? ... If you could sell maybe 2000 tickets, you will typically be booked into a 1000 seat soft seater and that is that. The shortage of concert tickets is artificial at that point."

Space in a physical venue is a real scarcity. We're dealing with atoms, not bits. You couldn't offer more seats without getting a bigger room, which requires money and effort because you need the space and the capacity. The marginal cost of adding seats isn't zero ad infinitum. That's a real, natural scarcity, that you can choose to alleviate to a certain extent, depending on the effort and costs you'll willing to deal with. To pretend that the same constraints apply to digital files, which can be copied indefinitely, is what's artificial.

"Heck, think of it this way: If you sold enough recordings in Fairbanks, you might have the money to afford to go there and have a scarce concert."

Why would anyone in Fairbanks want to buy music they've never heard? The reason you don't treat fans who are sharing your music as "little thieves hard at work" is because they're bringing your music to a wider audience of people who might want to buy something.

"So why not sell music, instead of giving it away for free?"

You give away digital recordings for free if you don't want to squander one of your most valuable resources. If you recognize that it costs essentially nothing to distribute digital audio files indefinitely, the smart thing to do would be to use that to your advantage to get people interested in your music, rather than pretending the files are scarce and that people won't get them from other sources, or assuming that people will want to pay for digital recordings they've never heard. Then, you "sell the music" in other ways.

You seem to think that the only way to sell music is to sell plastic discs that have copies of the recordings on them, or to sell access to recordings encoded as 0s and 1s. That's a pretty limited view of what music is. I think there are lots of other ways to sell the music without relying solely on the sales of copies of recordings.

Mass exposure isn't always desirable

You give away digital recordings for free if you don't want to squander one of your most valuable resources. If you recognize that it costs essentially nothing to distribute digital audio files indefinitely, the smart thing to do would be to use that to your advantage to get people interested in your music, rather than pretending the files are scarce and that people won't get them from other sources, or assuming that people will want to pay for digital recordings they've never heard. Then, you "sell the music" in other ways.,

A concept that I have tried to bring up on Techdirt, but which has been hard for some to grasp, is that for selling some goods, mass exposure may not be a good idea. For some products, keeping everything secret or semi-secret and using only true word-of-mouth (people telling friends one-on-one in person) may enhance the cachet.

So giving music away for free is a good idea if you want to reach the widest possible audience. But if you want a highly targeted audience, you may prefer that it ISN'T distributed to everyone, even if it costs you nothing to do it.

There may be a time when some musicians never record their music and only play live.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

In the end Blaise, you are playing the magic word games that Mike is so famous for.

Selling music for me is "selling recordings". Performing music is "giving concerts". Calling a performance "selling the music" is a pretty cute way to avoid the point, nothing else.

You give away digital recordings for free if you don't want to squander one of your most valuable resources. If you recognize that it costs essentially nothing to distribute digital audio files indefinitely, the smart thing to do would be to use that to your advantage to get people interested in your music, rather than pretending the files are scarce

Digital recordings aren't free. That's the main point. Even darlings of this site like Jill Sobule will say that her last album done on the cheap (except for the producer) was still $75,000. Yes, the individual extra copies are effectively free (marginal cost) but the reality is the total per unit cost to make the music is NEVER zero. Labeling it as free is basically writing off the $75,000 you spent to get there as a loss up front.

I think there are lots of other ways to sell the music without relying solely on the sales of copies of recordings.

Sorry, but here you are talking in circles. If you are giving away your music, there is no sale. You might sell concert tickets, or you might sell the proverbial t-shirt, but you aren't selling music.

The point I am making to you is this: In Toronto, where people can drive downtown to hear you in the 100 seat club you are playing in, and put money in your tip jar and buy the t-shirt, things are easy. But much of the population of the world live outside of urban centers, or in places where no "artist" will ever play. They are willing to buy things they like, but by making your music free, you have made the one thing they really like cost them nothing. They will never see you in concert, they get no thrill out of a "Blaise Rocks!" t-shirt, and they aren't going to spend $29.95 a month to be a member of your fan club. They just wanted some nice tunes to listen to, and you let them have it for nothing.

It's a nonsensical business approach, supported only by a myopic look at supply and demand if you agree to allow your work to be stolen / pirated / traded for free. The supply is still up to you, don't let the pirates make that choice for you.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

Digital recordings aren't free. That's the main point. Even darlings of this site like Jill Sobule will say that her last album done on the cheap (except for the producer) was still $75,000. Yes, the individual extra copies are effectively free (marginal cost) but the reality is the total per unit cost to make the music is NEVER zero. Labeling it as free is basically writing off the $75,000 you spent to get there as a loss up front.

Yes, that's kind of what I have been saying too. I'm not going to argue about whether or not recorded music should be free, because it essentially is.

But you've still got to figure out how to pay for what goes into making music. Even if you try to reduce the costs as much as possible, you will still have expenses. So you will need to find ways to cover the costs. You can either do it via asking for donations/sponsorships; selling music-related stuff; or have a non-music job and generate income that way and treat your music as a hobby, which is what many people do. For a lot of people, it makes more financial sense to have a good day job to support their music habit than to try to get into the merchandise business, to tour, or to put in a lot of effort generating enough content to make a subscription business worthwhile.

Re:

"Remove that price, and suddenly the allure of piracy goes out the window. It's no longer cool, and what you are getting has no real value. You are no longer sticking it to the man, because the man stuck it to himself already."

By the way, I'm not really taking about "piracy." Unauthorized distribution factors in, in the sense that if you don't make something available for free, someone else will, but it's pure myth to think that demand will disappear when something's available for free.

I don't buy software, but I don't "pirate" it either. I use free software, open source software that you couldn't "pirate" if you tried because it's legally available for you to use and distribute. It's still pretty "cool" in software circles. If anything, that kind of freedom adds to the "allure." Just ask IBM or Google.

I don't buy it for a second that "what you are getting has no real value" if it's available for free.

And this isn't about "sticking it to the man." I don't feel compelled to "stick it to the man" when he's shooting himself in the foot. If anything, I feel pity. But I sure as hell don't want to be near the gun that's firing.

Music populism

All I have done is take current trends and project them out a few more years.

We've got the technology now for people to do a lot in their homes. People who can't write their own music can remix it. Or they can create videos using someone else's music.

Karaoke is popular because just about anyone can do it.

As music becomes easier to create, and there are more ways for everyone to get involved, then everyone becomes a creator in some fashion.

The idea that we will have artists and they will have their group of fans who support them seems to still be grounded in older models. I see us heading toward the day when the walls between artists and fans are pretty much non-existent.

Fan empowerment. They don't need to be so passive anymore. They will have the tools to become their own stars. Every song will become content that fans can reconstruct to fit their own needs and purposes.

So I am trying to get people to think creatively beyond the current model. The idea that there will be a vast audience of adoring fans who will buy stuff from their rock star heroes may not be the future.

more to music than money

I would like to see hard core "real" numbers of how working musicians are making more money from giving things away. I don't want this typical redundant rhetoric I've heard a million times before. Give me real solid examples (and I don't want to hear about Nine Inch Nails). And I don't want to hear about the upper 10%, I want to hear about how the other 90% can monetize, and are monetizing, on free, and paying the mortgage.

The real connections

What I saw more typically is that rather than people forming connections to musicians whose music they like, they end up liking the music created by people they already have connections to.

If the bar down the street has a band made up of your friends and neighbors, the cover charge and the booze are cheap, and they play music you can dance to, you are going to go and have a great time. They may not be the most talented band, but you like them and they show you a good time.

Or perhaps on Friday evening a band you like is playing a concert, but your daughter is also playing a concert at her school. Which music event are you going to attend? Probably your daughter's, even though she's not as talented as that band.

"Oh, live shows? Well, let's say I live in Fairbanks, Alaska. Remind me again how many major acts have hit Fairbanks this year?"

"Selling digital audio files or not doesn't make Fairbanks any less remote. But, take advantage of the fact that you can get your music to Fairbanks through the web without having to travel there?"

Imagine a band uses the Net to spread its music far and wide, to thousands of such towns all over the world, where they cannot obviously sell the scarce concerts. And not everyone may want the scarce T-shirts or scarce tote bags. Hell, they may be sick of them.

Hey presto! A new business model, newer than the Masnick model. Bands turn the scarcity thing on its head saying "Look, we don't want you guys to buy stupid T-shirts or hoodies. Buy our music, because we know that's what you want." And it's back to shiny discs and MP3s for sale...who knows what the future has in store.

You think music is valuable; why do you assume MP3 files or music in containers won't be valuable to fans, given that you constantly exhort bands to free their music and sell T-shirts? Ultimately it is for the band to find out what their fans find valuable, which they will pay for and exploit it.

"Price exists because of scarcity, it's a mechanism for allocating scarce resources. That it disappears in the face of abundance shouldn't be a surprise."

Does price exist only because of scarcity? That seems to be the general philosophy out here. Price also exists because there is a demand, even if said product is available in abundance -- iTunes is proof you can put a price on a digital file. So, price need not disappear in the face of abundance.

"(And a correction: artificial scarcities are what you don't want to sell -- sell real scarcities)"

Are T-shirts real scarcities? Except for concerts, since no two concerts are identical, I don't see any "scarcity" of musicians that isn't artificial. All "limited edition whatever" are artifical scarcities.

Re:

Hi cram

"You think music is valuable; why do you assume MP3 files or music in containers won't be valuable to fans..."

I don't think I said otherwise. Of course digital audio files or other containers are valuable. It's just that value and price aren't the same thing. They may be valuable, but not able to command much of a price, and thus not be a great basis for a business model.

"Does price exist only because of scarcity? That seems to be the general philosophy out here. Price also exists because there is a demand, even if said product is available in abundance -- iTunes is proof you can put a price on a digital file. So, price need not disappear in the face of abundance."

Well, the price pressures on iTunes are still pushes towards zero. Do you know anyone whose iPod contains mostly music from iTunes? $1/song is pretty expensive when you're talking tens of thousands of songs. People use iTunes, but they still get music from other sources.

And I'd argue that there are some scarcities you're paying for with an iTunes purchase, like the convenience of a simple, single, legitimate source for a wide variety of music. By all means, artists should list songs in an iTunes store. But have you heard of any artists living solely off iTunes revenue? You can sell digital audio files if people are willing to pay for the convenience of accessing them a certain way, or if people want to support you with their money, but I don't think it'd be wise to go the iTunes route in place of making digital audio files available, capitalizing on the abundance and offering some other real scarcities. iTunes, sure, but I wouldn't lock audio files up and bet the farm on it.

"Are T-shirts real scarcities? Except for concerts, since no two concerts are identical, I don't see any "scarcity" of musicians that isn't artificial. All "limited edition whatever" are artifical scarcities."

Limited edition goods aren't artificially scarce. Physical goods are scarce because they're made of atoms, not bits. The marginal cost of reproduction is not zero. Sure, you could continue making t-shirts indefinitely, but that requires an ongoing effort. Digital goods are "infinite goods" because no real effort is require on your part for their continued reproduction.

I don't see anything wrong with only choosing to produce a certain quantity of a product, with only putting a certain effort in. That's not artificial scarcity, it's recognizing scarcity and only choosing to alleviate it to a certain extent. The scarcity is natural.